Employment contracts set out the obligations of both the employer and employee for a specific job role. However, there may come a time when those obligations change, necessitating an amendment to employment contracts.
Both employers and employees may propose changes to the contract and both parties need to be in agreement before any alterations can be made official. It is vitally important that employers ensure complete legal compliance when proposing changes in contracts of employment.
If you are proposing changing the terms and conditions of employment contracts, our specialist employment law team can guide you through the process. From changing employment contracts to updating staff handbooks, our team has extensive, specialist legal knowledge in this area.
When contract changes are needed
There are a number of reasons why amendments to employment contracts may be required, including:
• The introduction of new laws and regulations
• Alterations to terms and conditions of employment – for instance, the introduction of a pension scheme or maternity/paternity pay.
• Changes to the company itself and how it operates
• Business restructuring
• Adjustments to working hours, role obligations or salaries.
Employers should propose changing contracts of employment only if they are sure the alteration will solve a current issue within the business – e.g.: the reassignment of specific job obligations to a specific employee after business restructuring.
Employees can also propose changes, if they feel recent changes to their role should be reflected in the legal document of an employment contract. An employee cannot insist upon a change, unless they are covered by a legal right.
How changes can be made
There are three main steps to follow when it comes to proposing changing terms and conditions of employment:
1. Consultation: Employers must consult with the relevant employees before changing contracts of employment to ensure transparency and fairness. should also be communicated to any representatives, such as trade union officials, and the employer should listen to any alternative solutions presented.
2. Documentation: Any significant proposed amendment to employment contracts must be documented in writing and all relevant employees must be provided with the proposed updated terms and conditions of their employment.
3. Fair procedure: If an employee does not agree to the proposed changes to their contract, an employer may choose to dismiss and then re-hire the individual, under new terms and conditions. If this is the case, employers must follow the dismissal and re-engagement code of practice set out by the government.
Please note that the ability to dismiss and re-hire employees is currently under governmental review – please contact our team for the latest updates.
Our employment law team can help you find out if is it legal to change a contract of employment in the way you wish.
If an employee agrees to the changes
If the employee agrees to the amendments to their employment contract, they must be sent a copy of the updated contract within one month.
This process minimises legal risks and fosters a positive working relationship, where the employee is fully aware of their obligations at work.
If an employee does not agree to the changes
In the event that an employee does not agree to the proposed change to the terms and conditions of employment, an employer can consider negotiation or mediation.
As an employer, it is important to remember to keep all negotiation discussions constructive and to try and make the proposed changes easier for the employee. For instance, by introducing a change in stages or on a temporary basis only.
If a resolution cannot be reached, an employee has the right to:
• Raise a grievance
• Refuse to work under the new conditions
• Work under protest
• Resign.
An employer can impose a change – however, they should be aware that the employee may then decide to resign and claim constructive dismissal, triggering a potential employment tribunal claim.
If a trade union is involved when a change is imposed, employers should be aware that industrial action may occur, such as a strike or ‘work to rule’ approach.
Employees requesting changes to a contract
There are a number of reasons why an employee might request amendments to an employment contract, including:
• Altered responsibilities since their initial acceptance of the contract
• A request for improved terms and conditions or role modifications
• A request for flexible working
• Salary changes or reviews.
It is important that employers listen carefully to employee concerns, take all requests seriously and review any proposed changes fairly and promptly.
How often should employment contracts be updated?
It’s a good idea for employers to review their employment contracts annually to identify any need for alterations or updates.
Employers should ensure their employment contracts continue to align with current legislation and cover the company’s needs, while also remaining fair to the employee.
Risks of Changing a Contract
Altering employment contracts can sometimes damage workplace morale and employee trust, especially if the changes are handled poorly by the company.
There are a few risks employers should be aware of when considering changing an employment contract, such as:
• The potential costs of legal disputes
• Increased employee turnover
• Damage to workplace morale and staff satisfaction
• The potential for increased sick days or absences
• Valued employees leaving the business
• Reputational damage to the business
• Strikes, industrial action or collective action
• The possibility for tribunal claims.
If you are concerned about implementing necessary contract changes, our employment team is here to help.
Need help changing an employment contract?
Our employment law team can help both employers and employees when it comes to contract changes.
Get in touch with our helpful team today to discuss your specific circumstances.
Tel: 0191 232 3048
Email: enquire@beechampeacock.co.uk
